Donald Trump is set to blow up GOP orthodoxy — again

From: washingtonexaminer.com, by Byron York, on Aug 29, 2015, see the article HERE.

First Donald Trump antagonized the Republican establishment with his proposals on immigration. Then he irritated some with his stands on trade and Social Security. Now Trump is preparing a tax proposal that will again set him far apart from the party’s powers-that-be.

The problem for the establishment is that Trump’s positions on all three issues are more in line with the majority of American voters than the establishment’s preferred policies. By using his popularity to force outside-the-GOP-box ideas into the Republican presidential debate, Trump is displaying an uncanny sense of the divisions between voters and the GOP power structure.

Trump has been sending signals that his tax proposal, which he says will be “comprehensive,” will include higher rates for some of the richest Americans, a position generally at odds with Republican orthodoxy. “I want to see lower taxes,” Trump said at an appearance in Norwood, Mass., on Friday night. “But on some people, they’re not doing their fair share.”

In particular, Trump has said he will go after “carried interest,” which refers to the practice of hedge fund managers who make hundreds of millions of dollars a year paying a lower tax rate than Americans who earn ordinary wages. “I would take carried interest out, and I would let people making hundreds of millions of dollars a year pay some tax, because right now they are paying very little tax and I think it’s outrageous,” Trump told Bloomberg Politics last week. “I want to lower taxes for the middle class.”

“Hedge fund guys have to pay up,” Trump said Friday on MSNBC. “I’m going to lower taxes, but these hedge fund guys are making a lot of money — I have friends who laugh about how little they pay — and it’s not fair to the middle class.”

Trump appears to have a special concern about hedge fund executives — “They don’t really build anything, they shuffle paper,” he said on MSNBC. But his comments to Bloomberg suggest he might also target “people making hundreds of millions of dollars a year” in a more general way. Asked about a broad policy of increasing taxes on the super rich, Trump campaign manager Corey Lewandowski would say little about Trump’s intentions, but noted that “Mr. Trump has said that he does not mind paying what is required to make our country great again.”

Raising taxes on anyone, even the super rich, has generally been anathema to Republicans for a generation. But Trump will probably find a receptive ear among American voters overall. An academic study by Stanford professor David Broockman and Berkeley Ph.D candidate Douglas Ahler — a study that also had revealing findings about immigration — suggests that Trump’s views on taxes are closer to the public’s than those of Republican elites.

In the paper, Broockman and Ahler examined a broad range of public opinion on several issues. They conducted a poll in which respondents, rather than being given either-or policy options, were presented with a range of seven different possibilities on a particular issue, from the far left to the far right. On the question of federal taxes, these are the options Broockman and Ahler presented to respondents:

1. Establish a maximum annual income, with all income over $1,000,000 per year taxed at a rate of 100 percent. Decrease federal taxes on the poor and provide more services benefiting the middle class and poor.

2. Increase federal income taxes on those making over $250,000 per year to pre-1990s levels (over 5 percent above current rates). Use the savings to significantly lower taxes and provide more services to those making less and to invest in infrastructure projects.

3. Increase federal income taxes on those making over $250,000 per year to 1990s rates (5 percent above current rates). Use the savings to lower taxes and provide more services to those making less while also paying down the national debt.

4. Maintain current levels of federal spending and federal income taxes on the rich, middle class, and poor.

5. Decrease all individuals’ income tax rates, especially high earners who pay the most in taxes now, accomplished by decreasing government services.

6. Move to a completely flat income tax system where all individuals pay the same percentage of their income in taxes, accomplished by decreasing government services.

7. Move to a flat consumption tax where all individuals pay the same percentage of their purchases in taxes, banning the income tax, even if this means the poor pay more in taxes than the rich. Significantly decrease government services in the process.

Broockman and Ahler found the most favorable responses clustered on the left side of the spectrum. The results: 11.7 percent favored Option 1; 26.2 percent favored Option 2; and 28.6 percent favored Option 3. Together, that is 66.5 percent — two-thirds of those surveyed — on the tax-the-rich side.

On the right side, Broockman and Ahler found 7.9 percent favored Option 7; 13.3 percent favored Option 6; and 1.4 percent favored Option 5. That’s a total of 22.6 percent. Right in the middle — Option 4 — was favored by 10.9 percent.

If Broockman and Ahler are correct, it seems unlikely Trump’s tax-the-super-rich proposal will hurt him with large numbers of voters, certainly not with general-election voters. But what about Republican primary voters specifically? It’s unclear, but a recent CNN poll showed that by a large margin, GOP voters believe Trump is best equipped to handle the economy — 45 percent of those surveyed chose Trump, compared to the second-place finisher, Jeb Bush, with eight percent.

Bush has already denounced Trump’s tax intentions. “I cut taxes every year; he’s proposed the largest tax increase in mankind’s history, not just our own country’s history,” Bush said at a recent appearance in Keene, N.H. Bush was apparently referring to a 1999 Trump proposal — Trump was toying with the idea of running for president back then — in which Trump advocated a one-time-only tax of 14.25 percent on the net worth of all Americans worth more than $10 million. Under Trump’s proposal, the money raised would have been used to pay off the national debt completely and use the resulting savings — all the interest the government no longer paid — to cut taxes and shore up Social Security.

Trump no longer supports the idea, which — to put it charitably — economists at the time thought was wildly impractical. But the question is whether Bush and other Republicans will get much traction using Trump’s 16 year-old notion against him now. Even if Bush characterizes it as a crackpot scheme, the core of the plan was Trump supporting taxing the super rich to solve an enormous public policy problem. That’s going to hurt him badly now?

Dismissed as a “clown” and a “buffoon,” Trump has throughout the race shown a shrewd sense of the Republican establishment’s weaknesses with its voters. And now, he appears to be ready to challenge GOP orthodoxy one more time.

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Proposing a “tax plan” to the general public is fraught with danger. Many, if not most, people will simply take a knee-jerk position in favor of what sounds good without fully understanding the ramifications of revenue vs. expenses. But, what sounds good may not work and/or may not produce results that are desirable.

I looked over the seven proposals offered in the professor’s poll and honestly, I’ll have to see the numbers to select one of them. The government (even reducing budgets and anticipating various cost-cutting measures) requires a minimum revenue stream in order to function. There is a finite “no-go” point below which the government simply can’t operate (and I mean operate properly, not the out-of-control way it’s operating now).

I’d also have to have some sound estimates of how much each of the methods would generate in revenue. I’ve been responsible for the profitable operations of a business and decisions can’t be made unless you have sound information on which to base them. Trump, as a consummate businessman, will have expert 3-A’s (accountants, attorneys and actuaries) going over test scenarios to provide him with accurate, realistic data on which to base his proposals. His tax proposal will likely be realistic and will undoubtedly piss off the entire establishment GOP – so be it.

If he follows his immigration success with another plan – a tax plan – that the general public likes, he’s going to be damn near impossible for the RNC/GOPe to stop.

19 Responses to Donald Trump is set to blow up GOP orthodoxy — again

Tax everything but food, shelter and clothing. That includes if you dine on Belugia caviar, purchase the Taj Mahal for domicile and wear mink, ermine and seal clothes.
Everything else at a rate of 50% of retail value…

Can’t say that I like that proposal Buck. Taxing everything else at 50% – even considering that (I assume) there wouldn’t be any income tax, or even SSI or Medicare, the increase on autos, large appliances, etc. could really hurt the economy – or maybe I’m missing something?

I’m not sure. I don’t have the smarts to put pencil to it but every tv, SUV, motorcycle, boat, hammer, nail, radio etc. ad infinitum would carry money to the gov’t. Everything that is not food, shelter or clothing… It was just an idea from long ago.

Understand – that’s why I say that we’d have to see some real numbers to make a decision on which route to take. You’re right that the little stuff would add up and might support that method. But you mention SUVs, motorcycles, boats – how many folks could afford to buy one if the price was increased by 50% – I’d be afraid that it would put those manufacturers out of business (along with their employees).

Trump is now got favorable ratings of 61%. A total flip of the numbers. I can’t see him being stoppable. Too many of us like and favor Trump’s ideas. Jeb is going down the toilet. I haven’t met anyone yet who wants Jeb, a RINO. He gives us no spirit or incentive to vote for him. I don’t like his ideas on Common Core and illegals. Neither sits well with conservatives. And some of his backers have left him now.

Without knowing more detail, I’d lean toward a flat tax, and I’d want a lot more detail on that kicker phrase that’s included in several of the options – ‘decreasing government services’, namely which services?

I have to ditto what Pepp said about Bush and add that I never understood why they had him so high in the polls to begin with, when everything he said goes against what conservatives want.

Although I still have pause, it looks like we may be getting to a point where people start taking Trump seriously instead of expecting him to tumble.

I think you’re right Kathy, everyone is starting to take Trump seriously – especially the RNC/GOPe cabal – I think they’re scared shitless! Some form of a flat tax is attractive to me, but again, the devil is in the details. I even like Hannity’s “penny plan.”

I had to laugh at the “bleats it” comment Brian. That alone illustrates your personal opinion of Mr. Trump. And, by the way, an opinion that is not without merit. I’ll admit that I like the way that Trump has thrown a wrench into the best laid plans of the RNC/GOPe to steamroll Jeb into the presidency and for that, I thank him. Do I want him for POTUS, no I’d still rather have Ted Cruz, but if the choice comes down to Trump or Hillary, I’ll vote for Trump. I know that’s not your cup of tea, but that’s the way I feel.

You know. Hearing flat tax Makes for easy understanding but people a lot more math competent seem to see an issue. I kind of like Carson on this. Decreasing percent from top down by 100 thousands but most important I think is everyone contributes some even if only $1.00 per payroll and NO way to wriggle out with exemptions or any other twitches.

“When the people fear their government, there is tyranny; when the government fears the people, there is liberty” ~ Thomas Jefferson

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